20 July 2023

MAINS DAILY QUESTIONS & MODEL ANSWERS

Q1. Although the Indian Ocean area (IOR) is becoming more strategically significant, it also faces numerous challenges. Describe the threats that IOR poses to India’s security and the steps the government has taken to counter them.

GS II – International Relations

• The Indian Ocean is now more crucial for trade, transportation, and energy. In the waters of the Indian Ocean Region (IOR), economic development, debates, conflicts, and rivalry between regional and extra-regional governments aiming for regional domination are now taking place. In order to protect India’s national interests, the IOR’s security is crucial.

India deals with the following security problems relating to the Indian Ocean area (IOR):

• Crude oil demand has greatly increased as a result of China’s rapid economic growth. To secure its oil resources, China initiated aid and investment projects, such as sending peacekeeping operations to Mali in 2013 and constructing a naval facility in Djibouti. Due to China’s growing influence in the IOR, India is now faced with a number of security-related concerns on the military, political, and economic fronts.
• Security of choke points: The Strait of Hormuz, the Strait of Malacca, the Bab-el Mandeb, and other choke points are utilised to geographically restrict access to the Indian Ocean. Due to the enormous amounts of trade that pass through them, these choke points are of utmost strategic significance. However, these choke spots are vulnerable to accidents, political unrest, war, and piracy.
• Sea Lines of Communications (SLOCs) are under attack. Historically, SLOCs in the IOR have been exposed to a wide range of conventional and non-conventional threats. However, protection of these SLOCs against such attacks would be required given India’s growing reliance on maritime trade.
• Piratery: Since late 1990, Somalian-based piracy has worried people all over the world. Piracy is viewed as a constant burden on local sea trade and business.
• Extending the Belt and Road Initiative (BRI) in the IOR: In order to defend its interests in the Indian Ocean, China has been proactive in its approach to developing alternate routes for the transportation of its imports as well as establishing its presence in the region by giving aid and making investments through BRI. For instance, Gwadar port was first built in Pakistan. Subsequent ports, power plants, and transportation projects were built in Sri Lanka, Bangladesh, and Myanmar.
• Unfortunately, the Golden Crescent and Golden Triangle, two of the most notorious locations in the world for drug manufacture, are located in the Indian Ocean region. Drug traffickers create extensive global networks that act as a conduit for other destabilising operations including the trafficking of people and weapons.

The following are some government initiatives to address the aforementioned issues:

• The SAGAR plan, which stands for Security and Growth for All in the Region, aims to protect both the islands and the mainland of India’s marine interests. It serves as a hub for economic growth, naval security, and maritime cooperation. The importance of the Coast Guard organisations in the littoral states in preventing acts of piracy by non-state actors is also emphasised.
• Mission-based deployments: In an effort to boost maritime security, Indian Naval ships and planes are routinely sent on ‘Mission Based Deployments’ throughout the Indian Ocean region.  Two examples are Operation “GULFDEP” in the Persian and Gulf of Oman and Operation “MALDEP” in the Andaman Sea and the areas surrounding the Strait of Malacca.
• In order to raise knowledge of the maritime domain in the IOR, India regularly exchanges marine information bilaterally with friendly foreign nations. This comprises details about the military forces and navies of rival or hostile nations, an evaluation of maritime actions that both parties deem worrisome, as well as actions pertaining to transnational marine-based threats.
• Indian Ocean Naval Symposium (IONS): This is a two-yearly calendar of activities for the Indian Ocean’s littoral states. It offers a platform for discussing regional marine concerns, improving maritime security cooperation, and cultivating goodwill among the member governments. India served as the host country for the initial symposiums in 2008.
• Other measures: With the transfer of the Indian-built Barracuda patrol ship to Mauritius and the deployment of P-8I aircraft to Seychelles for the purpose of monitoring its exclusive economic zone (EEZ), India’s security actions in the Indian Ocean have already begun to take shape.
• Due to its geostrategic location, India is a natural and significant player in the Indian Ocean. Other steps, including as improving the efficiency of intelligence networks, utilising geopolitical resources like the Andaman and Nicobar Islands, and modernising military capabilities, should be taken into consideration to address the recent rise in security concerns.

Q2. The industrial sector in India has come under fire for its stagnating productivity. Discuss the causes of the industrial sector’s declining productivity as well as possible solutions.

Paper & Topic: GS III – Industry related issues

• The three primary economic sectors of India are agriculture, manufacturing, and services. Despite making up only 20% of India’s Gross Value Added, agriculture nonetheless employs around 55% of the country’s workforce. This required the eviction of workers from the agricultural sector and the hiring of more labourers by the manufacturing sector. But this did not occur in India. Between 2017 and 2022, manufacturing’s share of India’s GDP and total employment has mostly remained constant at 15 to 17%. The service sector currently accounts for the majority of India’s GDP.

The following factors account for the declining productivity of India’s manufacturing sector:

• India’s industrial sector stands out in comparison to other key developing nations for having relatively small-scale firms. India thus enjoys significantly fewer scale economy benefits than many other nations. Smaller businesses are much less productive than larger ones, which frequently adopt cutting-edge technologies and are thus more successful.
• High capital intensity: Although Indian businesses have stayed small, a significant portion of the country’s industrial output has been in fields where bigger output volumes are often required. A lot of money has always been needed for production. Given that the cost of capital has been relatively high compared to labour expenses throughout the bulk of the industry, manufacturing’s relatively high capital intensity appears out of step with relative prices.
• In India, the states’ levels of industrial productivity varies significantly from one another: the western and central states often have the greatest levels, while the southern and eastern states frequently have the lowest. Contrary to how states are ranked by GDP per capita, states in the South usually have greater incomes than their Western and Central equivalents.
• Less investment in people: Research indicates a significant link between business investments in personnel and productivity. This investment could lead to more income or improved benefits like better access to healthcare, recreational activities, festival bonuses, etc. However, due to India’s chronic unemployment issue, businesses have not invested much in their staff.
• Since the majority of workers shifted from the agricultural sector to the unorganised non-agricultural economy, productivity has grown. However, the formal sector, which is a high productivity industry, has also lost labour. As a result, changes in employment shares often cause the increase in labour productivity to slow down.

The following are some of the choices:

• Increasing the production process: India’s manufacturing productivity is double that of Indonesia. The productivity rates in China and South Korea are both four times greater. Key industrial processes can be improved to boost both labour and capital productivity simultaneously.
• To improve infrastructure and logistics and raise manufacturing productivity in India, improvements in government policy are required.
• Securing technology: India’s long-established manufacturing value chains already have the knowledge and resources necessary to compete with those of its overseas rivals. One strategy to persuade multinational corporations to begin operations in India, either independently or in collaboration with a local partner, is to establish a strong framework of time-bound and conditional localization incentives.
• One of the primary challenges to raising India’s industrial GDP is access to capital. After financial system reforms, it would be simpler for reliable, cash-generating manufacturers to obtain low-cost domestic borrowing through long-term savings accounts like pension funds and insurance.
• Building a better business environment: According to a number of national and international polls, India’s business environment has issues that have discouraged or skewed investment, which has had a negative impact on growth and job creation. Therefore, enhancing the business climate may contribute to the growth of India’s manufacturing industry.
• Upskilling the workforce: A competent workforce produces more. Knowledgeable workers produce more accurate, higher-quality work. The upkeep of the workforce can benefit from a commitment to training and development.
• Everyone is therefore aware of the significance of the industrial sector in rebuilding the economy. With programmes like Make in India, Production Linked Incentive (PLI) schemes, Ease of Doing Business, and others, the government has previously taken many steps. Former finance ministers claim that for the economy to expand at a rate of 8% per year, the manufacturing sector needs to increase from its current levels of 16–17% of GDP to a healthier 25%.